Tempers flare at Warren hearing

Tempers flared at a congressional hearing Thursday before the polarizing star witness, Elizabeth Warren, said a word.

Republicans on the House Oversight and Government Reform Committee were prepared to take on Warren over the Consumer Financial Protection Bureau, set to launch next week. But before Warren began her testimony, the committee’s top Democrat, Rep. Elijah Cummings, demanded that chairman Rep. Darrell Issa issue subpoenas to five of the biggest mortgage-issuing banks.

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“We have a fundamental difference of opinion about what we believe is important, and who we are here to serve,” Cummings said. The Maryland Democrat defended Warren and the consumer agency, saying she was “on the side” of homeowners – particularly soldiers – who had been foreclosed upon.

Issa cited House rules and tried to move on with the hearing, but other Democrats joined Cummings.

Rep. John Tierney (D-Mass.), who also called for the banks’ records, said to Issa: “What part of the English language, sir, do you not understand?” and Rep. Stephen Lynch (D-Mass.) repeatedly tried to get Issa’s attention, but the chairman ignored him.

The hearing, called “Consumer Financial Protection Efforts: Answers Needed,” was supposed to look at the powers of the agency, which many Republicans hold in deep mistrust.

Issa, who said he wasn’t out to “micromanage” the bureau, which is housed in the Federal Reserve, but said he wanted to see if the agency was “properly designed and prepared.”

“The Federal Reserve is not transparent,” Issa said. “The Federal Reserve does resist any kind of congressional oversight and considers it unreasonable interference.”

Warren eventually told the committee that the bureau is designed to help consumers answer whether they can afford something, and whether it was the best deal for them.

“As a country, we are all paying the high price for a broken consumer system,” Warren said in her opening remarks.

The consumer protection agency, which is a product of the Dodd-Frank financial reform bill signed by President Barack Obama almost one year ago, has no named director. Republicans have threatened to block Warren’s nomination if she is named, and they also favor a five-member commission to lead the bureau, rather than one person in charge.

Warren’s last appearance before Congress was an Oversight subcommittee hearing in May, which devolved into an ugly back-and-forth between her and Rep. Patrick McHenry. The North Carolina Republican tried to keep Warren longer than she had said she would be available, at which point McHenry accused her of lying about her schedule. McHenry later said he was “shocked by Ms. Warren’s blatant sense of entitlement.”

McHenry, on Thursday, said he wanted to know more about the types of financial products the bureau would target – insisting that those moves would cause uncertainty for investors and business leaders.

“I fear the actions by the Consumer Financial Protection Bureau that limit access to credit … would only further damage this troubling economy,” he said.